Mortgage Company Problem

I'm not naming my mortgage company as I don't want it to come back at me but here is my situation.

In 2008 my wife and I bought a Church Parsonage Home from the Church right next door to us. We got the house for a good deal and it's our first home. Upon buying the house we knew we had to file for a split sheet and the homestead credit. Once we went to the Assessors office and such to find out how much our taxes on our property would be they told us that since the home was owned by the Church that the property is Tax Excempt as the house and the Church property are joined. The taxes on our house wouldn't be available until the next year.

In 2009 around June our mortgage company and us received our tax paperwork. The taxes it showed was owed was almost $4,000. On the bill it also said in big red letters. "DO NOT PAY THIS IS NOT A BILL". Being concerned we went to the Assessors office once again and they said that the $4,000 in taxes is for both the Church Property and our House property in one. And since the Church is tax excempt and that our house doesn't have taxes figured yet that we do not have to worry about it.

Come to find out 2 months later our mortgage company proceeded to pay that $4,000 in taxes out of our escrow. Well being that we just bought our house and our escrow wasn't built up enough that immediately put us in Foreclosure due to back taxes.

We tried contacting our mortgage company to get this problem solved and we either got the run around or was hung up on. We told the Assessor what happened and they cut us a check for almost $4,000 to take care of this problem. We sent it to the mortgage company for them to just send it back to us saying the funds were not enough.

We have been fighting this since 2009 and here it is almost 2013. We have had to hire 3 different lawyers. 1st lawyer took us for $1,500. The 2nd lawyer for bankruptcy to save our home lied to us. Now our 3rd lawyer for bankruptcy is saying we can't afford it.

We had no problem paying our house payment or other bills until this problem. We still could pay our house payment with no hitch. But the only way to stop foreclosure is to file bankruptcy. But since we are being told we can't afford bankruptcy we are on the way to losing our home. We have been severely stressed due to not knowing when we might lose our house for the past 3 years and our marriage has been on the ritz due to it as well.

My question is do we have a lawsuit on our hands?

Location: Northern Indiana

JOwen2012:

we knew we had to file for a split sheet

I guess my first question is: what is a "split sheet"?

A Split sheet split our property from the churches property. But that only took effect until the new taxes were in place.

JOwen2012:

We have been fighting this since 2009 and here it is almost 2013. We have had to hire 3 different lawyers. 1st lawyer took us for $1,500. The 2nd lawyer for bankruptcy to save our home lied to us. Now our 3rd lawyer for bankruptcy is saying we can't afford it.

We had no problem paying our house payment or other bills until this problem. We still could pay our house payment with no hitch. But the only way to stop foreclosure is to file bankruptcy.

Bankruptcy can't stop foreclosure - who told you it can???  All it can do is (1) slow the foreclosure process down and (2) prevent the lender from getting a deficiency judgment against you (suing you personally for the difference between what they sold the house for after foreclosure and what they say you owe them, which typically includes fees and their costs to carry out the foreclosure as well as your loan balance).

Item (2) should have value to you since Indiana is apparently a "recourse" state that allows deficiency judgments, but that isn't the same thing as stopping foreclosure.

JOwen2012:

My question is do we have a lawsuit on our hands?

I personally think you have lots of lawsuits you should be able to file and win: one against the party who initiated foreclosure against you based on your failure to pay money you didn't owe, and one against each of the three lawyers you hired who didn't bother to figure out or aggressively pursue your case against the forecloser.  But in today's messed-up world I have no idea what your chances of winning might have been, and four years later it might be too late to start the case your first lawyer should have started for you but probably didn't.

There are several blogs (foreclosurehamlet.org, 4closurefraud.org) and a number of news stories "out there" about horror stories like yours, but the blogs only offer DIY advice (I guess most people facing wrongful foreclosure can't afford lawyers?) and don't point you to any lawyers as far as I can tell.

One website linked to this Indiana Appeals Court opinion:

http://www.in.gov/judiciary/opinions/pdf/02031001jgb.pdf

Maybe you could try contacting *** E.Q. Williams, the attorney who represented the Elliotts in that case?

One important question:  have you been faithfully making mortgage payments every month and also either funding your escrow account or paying the property taxes yourself during this whole time?  In other words, while all this time has been going by have you been honoring all the terms of your original mortgage, ignoring only their demands for money you feel you can prove you don't owe them and paying everything you feel you legitimately owe?

If not, I think you've hurt your chances.  If they refused your money, you probably should have put it all into a special account you opened for that purpose.

But I'm no lawyer so maybe I'm wrong about that.

We fell behind 1 month and then started making weekly payments to the company of $200 more than what we were supposed to. Then all of a sudden 1 day they said we cannot accept your payments anymore. We stopped getting statements, stopped being able to make any payments. Then we get a Sheriff at our door saying we are in foreclosure. We then come to find out that since we are in foreclosure due to back taxes that our monthly mortgage payment almost tripled to cover the back taxes.

JOwen2012:

We fell behind 1 month and then started making weekly payments to the company of $200 more than what we were supposed to.

In the old, logical world the bank would have sent you a late notice TELLING you what you needed to do to become current again.

JOwen2012:

Then all of a sudden 1 day they said we cannot accept your payments anymore.

That seems to happen in a lot of the horror stories I've read.  They shouldn't be allowed to get away with that, but they are getting away with it.

JOwen2012:

We then come to find out that since we are in foreclosure due to back taxes that our monthly mortgage payment almost tripled to cover the back taxes.

Wait - I thought they were foreclosing.  Did they at some point offer you a loan modification (is that why you were told of a new payment amount)?

You can probably look online at your county assessor's website to see what the taxes have been over the years since 2008.  Property taxes shouldn't be so high as to triple your mortgage payments.  Probably the bigger monthly payment also included a lot of other stuff, including catch-up for the payments you missed and junk fees and legal costs tacked on by your mortgage servicer.

You badly need a good lawyer.  Maybe this will help you winnow out the duds:

http://fightingfloridaforeclosure.com/pdf/Guide.pdf

We received statements until the whole tax issue happened and then they stopped coming.

They are foreclosing. The triple the monthly payment was to pay back the $4,000 in taxes that they paid out of our escrow that wasn't built up enough since we just bought the house.

Since the property was owned by the church for over 15yrs the home and the church property taxes were excempt and put together. The assessor couldn't give us a proper tax rate because of this. That's why they said it would take 1 full year to properly get the correct taxes for our property and until then we would stay tax excempt. But not even 8 months after we bought the house is when we went in foreclosure because our mortgage company paid the taxes for our property and the churches property when it was tax excempt.

The first lawyer was supposed to help us fight our mortgage company and put us in bankruptcy to save the home until things were fixed. Then he swindeled us out of $1,500, but originally saying he could help us and then after he had our $4,000 check from the Assessor he said he couldn't and then took the cash and ran.

The second lawyer was supposed to put us in bankruptcy and had us at a payment we could afford and then out of nowhere jumped our monthly payment by $500. We could no longer afford that.

Our 3rd lawyer has us in bankruptcy but now my wife has lost her job and my income alone can't afford the monthly payments.

We are in the search of yet another lawyer that can open a lawsuit against our mortgage company but having the funds to hire one is hard with having to pay the bankruptcy payment that I can't make. If we get dismissed because we can't pay then there will be an immediate Sheriff Sale on our home.

We are at wits ends here. Went through more stress with this house with not knowing what's going to happen next. Our personal lives have paid for it because of the constant worry of when we could be kicked out of our home. We bought this house because it's big enough for my family. (2 Adults and 4 Children) and now we are going to lose it unless something happens.

I can't afford the bankruptcy and we are thinking about letting it go because we can't handle it anymore. We are looking for some kind of relief, hence why i'm here and hoping somebody can point us in the right direction.

Do we have a lawsuit on our hands? And if so how should we go about this? Should we let our home go back to the bank (because of lack of funds)?

**I can afford on my income alone the house payment and everything just fine, but when everything is in bankruptcy the monthly payment I cannot."

Sounds like you are in Chapter 13 bankruptcy.  Here's an explanation of your options now that your income has dropped and you can't keep making your Chapter 13 payments:

http://www.westcoastbk.com/blog/2011/07/what-happens-if-i-cannot-afford-to-continue-making-my-chapter-13-plan-payments/

Looks like I was wrong - Chapter 13 bankruptcy can save your home, but only if you pay to get caught up, including (I'm sure) all the costs the mortgage servicer claims it incurred processing your foreclosure etc.  From what you've said about this mortgage servicer, I would guess that means if you follow through on the Chapter 13 you will end up WAY overpaying for your home.  Even if the bankruptcy court CAN give you a low enough Chapter 13 payment so you can afford it on only your income, if a large share of your BK payments will be going to pay the mortgage company's "costs," that will be a ripoff for you.

Since you did miss payments (the first one you mentioned, and then the ones you would have made if they hadn't refused to accept your money), you might be best off just converting your Chapter 13 to a Chapter 7, letting them take the home, and starting fresh.

If you can find a good aggressive lawyer like this one, only of course where you live, it would be worthwhile to ask what if anything he/she can do to help at this point:  http://fightingfloridaforeclosure.com/news/category/news/

Just seems like too much time has gone by and too many payments have been missed, so probably he/she will tell you it's too late.  And a lawsuit would consume more of your emotional energy and take time to resolve.